NEW YORK (CNN/Money) -
AOL Time Warner said Thursday it will sell shares of its cable operations, Time Warner Cable, to the public sometime in the second quarter of 2003.

Separately, Homestore Inc., which runs real estate Web sites, said it settled a multimillion-dollar contract dispute with AOL Time Warner.

Chief Financial Officer Wayne Pace, speaking at a media conference in California, said the timetable is consistent with what AOL Time Warner has said in the past. No details about the size of the initial public offering were given.

A successful IPO could only help the No. 1 media company, whose shares are off 57 percent from their 52-week high, hurt in part by an investigation into accounting at the company's America Online unit.

But David Menlow, president of IPOFinancial.com, suspects that the company will sell too large a stake of the unit to the public, hurting demand for the IPO and forcing underwriters to lower the offering price of the shares.

"A cable offering is going to be looked at as an act of desperation," Menlow said. "It's a buyer's market."

The settlement, announced after the market closed, calls for Homestore (HOMS: Research, Estimates) to pay AOL $7.5 million in cash to terminate the previous agreement and will allow AOL to draw down on an existing $90 million letter of credit secured by cash on Homestore's balance sheet. The two companies have signed a new deal to provide America Online with residential real estate content, Homestore said.

Separately, the Washington Post said Thursday the company will take a charge of at least $10 billion to write off the declining value of America Online. Responding, AOL Time Warner said it could not confirm the $10 billion figure but said there will be a non-cash charge that will not affect operations or cash flow. The company releases fourth-quarter earnings on Jan. 29.

Time Warner Cable is one of AOL Time Warner's biggest units, delivering revenue of $5.2 billion in the first nine months of last year, or 18 percent of the company's total $29.6 billion revenue during the period. The unit, which also includes the Road Runner high-speed Internet access service, has 12.8 million subscribers.